Finance Act 2021

Stamp duty land tax U.K.

87 Temporary period for reduced rates on residential property U.K.

(1) The Stamp Duty Land Tax (Temporary Relief) Act 2020 is amended as follows.

(2) In section 1 (reduced rates of SDLT on residential property for a temporary period)—

(a) in subsection (1)(b) (which specifies the end of that temporary period), for “31 March 2021” substitute “ 30 June 2021 ”,

(b) in subsections (1) and (6)(a), for “temporary” substitute “ initial temporary ”, and

(c) in the heading, for “a temporary” substitute “ an initial temporary ”.

(3) After that section insert—

“1A Further period for reduced rates of SDLT on residential property

(1) This section makes modifications of Part 4 of the Finance Act 2003 in relation to any land transaction the effective date of which falls in the period (“the further temporary relief period”)—

(a) beginning with 1 July 2021, and

(b) ending with 30 September 2021.

(2) Section 55(1B) (amount of stamp duty land tax chargeable: general) has effect as if for Table A there were substituted—

“TABLE A: RESIDENTIAL

Part of relevant consideration	Percentage
So much as does not exceed £250,000	0%
So much as exceeds £250,000 but does not exceed £925,000	5%
So much as exceeds £925,000 but does not exceed £1,500,000	10%
The remainder (if any)	12%”.

(3) Schedule 4ZA (higher rates of stamp duty land tax for additional dwellings etc) has effect as if for the Table A in section 55(1B) mentioned in paragraph 1(2) there were substituted—

“TABLE A: RESIDENTIAL

Part of relevant consideration	Percentage
So much as does not exceed £250,000	3%
So much as exceeds £250,000 but does not exceed £925,000	8%
So much as exceeds £925,000 but does not exceed £1,500,000	13%
The remainder (if any)	15%”.

(4) Paragraph 2(3) of Schedule 5 (amount of SDLT chargeable in respect of rent) has effect as if for Table A there were substituted—

“TABLE A: RESIDENTIAL

Rate bands	Percentage
£0 to £250,000	0%
Over £250,000	1%”.

(5) In a case where—

(a) as a result of section 44(4) of the Finance Act 2003 the effective date of a land transaction falls in the further temporary relief period, and

(b) the contract concerned is completed by a conveyance after that period ends,

section 44(8) of that Act is not to apply in relation to that conveyance if the sole reason that (but for this subsection) it would have applied is that the modifications made by this section have no effect in relation to that conveyance.

(6) Section 44(10) of the Finance Act 2003 applies for the purposes of subsection (5).”

88 Increased rates for non-resident transactions U.K.

Schedule 16 makes provision for increased rates of stamp duty land tax in respect of non-resident transactions.

89 Relief from higher rate charge for certain housing co-operatives etc U.K.

(1) In Schedule 4A to FA 2003 (higher rate of SDLT for certain transactions), after paragraph 5F insert—

“Qualifying housing co-operatives

5FA Paragraph 3 does not apply to a chargeable transaction so far as its subject-matter consists of a higher threshold interest that is acquired by a company on a day on which the company is a qualifying housing co-operative for the purposes of section 150(3A) of the Finance Act 2013 (relief from ATED).”

(2) In that Schedule, after paragraph 5K insert—

“5L (1) This paragraph applies where relief under paragraph 5FA (qualifying housing co-operatives) has been allowed in respect of a higher threshold interest forming the whole or part of the subject-matter of a chargeable transaction.

(2) References in this paragraph to a qualifying housing body are to—

(a) a company that is a qualifying housing co-operative for the purposes of section 150(3A) of the Finance Act 2013 (relief from ATED),

(b) a registered provider of social housing, or

(c) a registered social landlord.

(3) The relief under paragraph 5FA is withdrawn (subject to sub-paragraph (4)) if—

(a) on any day in the period of three years beginning with the effective date of the chargeable transaction (“the control period”), the purchaser is not a qualifying housing body, and

(b) immediately before the first day on which that is the case the purchaser still holds the higher threshold interest or holds a chargeable interest derived from it.

(4) If, on any day in the control period, the purchaser is not a qualifying housing body because it ceases to exist (whether by virtue of a conversion into, or amalgamation with, another person or for any other reason), relief is not to be withdrawn under this paragraph unless—

(a) another person (“the first successor”) has succeeded to the engagements of the purchaser, and

(b) condition A or condition B is met (and if condition B is met, subject to sub-paragraph (7)).

(5) Condition A is that, on the day the first successor succeeds to the engagements of the purchaser (“the day of succession”), the first successor is not a qualifying housing body.

(6) Condition B is that—

(a) on any day in the part of the control period that falls after the day of succession, the first successor is not a qualifying housing body, and

(b) immediately before the first day on which that is the case the first successor still holds the higher threshold interest or holds a chargeable interest derived from it.

(7) If condition B is met because the first successor ceases to exist (whether by virtue of a conversion into, or amalgamation with, another person or for any other reason), relief is not to be withdrawn under this paragraph unless it would have been withdrawn by virtue of sub-paragraph (4) if references in sub-paragraphs (4) to (6)—

(a) to the purchaser were references to the first successor, and

(b) to the first successor were references to the person who has succeeded to the engagements of the first successor (“the second successor”).

(8) Sub-paragraph (7) is to apply to the second successor as it applies to the first successor, and so on, subject to the necessary modifications.”

(3) Schedule 17 contains minor and consequential amendments of Part 4 of FA 2003 (stamp duty land tax).

(4) The amendments made by this section and Schedule 17 have effect in relation to any land transaction of which the effective date is 3 March 2021 or a later date.